Difference Between Government And Commercial Accounting
The main dissimilarities or difference between government accounting and commercial accounting can be pointed out as follows:
1. Introduction
Government Accounting: Process of collecting, summarizing and proper recording of financial transactions (revenues and expenditures) of government organization.
Commercial Accounting: Process of identifying, collecting, summarizing and proper recording of business transactions of financial nature of business firms.
2. Purpose
Government Accounting: To show the position of public properties and funds.
Commercial Accounting: To show the net results (profit or loss) and financial position (profitability, liquidity, solvency etc) of the business.
3. Basis
Government Accounting: It follows cash basis system
Commercial Accounting: It follows accrual basis system
4. Government Budget
Government Accounting: It is guided by the government budget
Commercial Accounting: It ignores the government budgeting
5. Auditing
Government Accounting: Books of accounts are audited by a constitutional body of the government.
Commercial Accounting: Books of accounts are audited by a professional auditor.
6. Accounting System
Government Accounting: Generally, it is maintained under single entry system
Commercial Accounting: It follows the principles of double entry system
Also Read
7. Final Account
Government Accounting: It does not require final account
Commercial Accounting: It requires final account to show profit or loss of the business.
Government Accounting Vs Commercial Accounting (Comparison Chart)
I hope this post is helpful to understand the difference between government accounting and commercial accounting and to make comparison between them.
Government Accounting Vs Commercial Accounting (Comparison Chart)
Basis For Difference
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Government Accounting
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Commercial Accounting
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Introduction
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Collecting, summarizing and recording of revenues and expenditures of government organizations
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Collecting, summarizing and recording of financial transactions of business organizations
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Purpose/Objective
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To disclose the position of public funds
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To disclose the financial position of the business
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Basis Of Accounting
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Cash basis
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Accrual basis
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Government Budget
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It follows government budget
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Ignores government budget
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Audit
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By constitutional body
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Professional auditor
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Accounting System
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Single entry
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Double entry
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Final Account
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Not needed
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Needed
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I hope this post is helpful to understand the difference between government accounting and commercial accounting and to make comparison between them.
